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tv   In the Loop With Betty Liu  Bloomberg  May 22, 2014 8:00am-10:01am EDT

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i am betty -- betty liu. why he tried to make the midwest -- and what he thinks about raising the minimum wage. here's a look at our top headlines. sales keep tricking at best buy. fell moreter revenue than three percent, and i frequently you drop. starts trading at the nasdaq. an activist wants to boot the entire board -- it has agreed to sell its red lobster chain. him -- over in russia, missing petersburg forum is underway. this is overshadowed by the conflict in ukraine and clinical tensions with the u.s. for more, i want to bring in ryan.
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i -- who is not attending is also -- almost as important as who is. quest that is right. -- >> that is right. u.s. ceos will not be showing up. really all of them dropped out. why? the white house told them to stay away. by march, they follow instructions. -- by and large, they follow instructions. they really stood much more strongly and had many more business ties with russia. a lot of national organizations, none of them coming.
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it looks like this is a big signal humming from international community, not just the white house. this business forum is basically a showcase for them. betweenbegin a signed -- u.s. -- to vladimir putin class i was talking and he said it is a very real pivot for these. a pretty common school of thought that think sanctions the u.s. introduced, particularly against russian officials, had
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nothing to do with the ukraine at all. changes they want a regime change. believes sanctions are here to stay. you look at a lot of sanctions, to inhibit russia and the united states. the books forever. russians think the sanctions might be around for a good while. president putin's response is, look, if you do not want to do business with us, fine. we have a serious pivot toward these here that is just what one banker said. if that is the case, that is a very significant development when it comes to russian business ties. >> it is. thank you for your report. illinois,e u.s., mcdonald's workers are not loving it. a group of fast food employees protest outside of headquarters
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leading to an annual shareholders meeting this morning. shareholders will be voting on several issues, including the ceo's $9.5 million. on the ground, tell us what the security of flight. quest you can see protesters have gathered behind me. it is a real pr nightmare. so bad yesterday, mcdonald's closed one of its five headquarter buildings and told its employees to stay at home and work from home to avoid the 8000 protesters who stormed through the entrance, marched up the drive way behind me, where ultimately 138 mcdonald's , labor, and clergy members were arrested for trespassing. "no are back at it again, burgers, no fries, make our wages supersize." considerably
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smaller today because many people had to go back to their day job at mcdonald's. quest they have been protesting for several months. they launched a global protest last week. quest mcdonald's is still responding saying $15 is really they are looking to see what congress might do to raise the minimum wage. they are really hunting this onto washington. hard from today's meeting.
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a waningthere has been media interest and understanding media companies are what they used to be. they won't be making in the stores, betty. quest is anyone believe senior management will actually address hiking path the meeting? >> is hit -- if history is any indication, they will. reallytest behind me is driving public sentiment. you can expect them to field but we do nots, expect them to act on that today. what they're voting on today is really eeo pay. from line workers say it is not something they will officially address. it is certainly at the top of what people are interested in hearing about. quest thank you so much.
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you can watch our bloomberg television special, inside including our exclusive interview with the ceo and his opinion on minimum wage. moving and shaking this hour, the bank of america and ceo, dismantling an electronic making unit he may just last year according to people familiar with the matter. the business was started to serve clients but was killed for two reasons. increased scrutiny and conflict of interest. former wall street workers have found a new way to make a profit during mortgage brokers and
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stock sales man our pitching with that credit. how big is the business? >> it has grown to $3 billion a year. you can originate loans to small -- from small businesses and earn commission, as much as 12% the amount of the loan. quest that is incredible. any regulations around this? >> you avoid most of the consumer regulations. there are state law that apply, but no licensing or oversight of those brokers. quest described to me how this is exactly working.
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are big and legitimate companies doing this. one of them is called on deck capital. froms got a credit line lenders like goldman sachs. it lends to small businesses across the country. about $175 packaged million in the loans into securities so they can market institutional investors. quest this is like subprime lending we are talking about eight years ago except in that of loans -- homeowner loans, we're talking about subprime is.s in this quest is not the same scale, but they are applying the same techniques. evidence let -- any the lenders are taking advantage of small businesses? if they have bad credit, they're having our time getting any capital. >> they were desperate at the time and should've known better, but they really wanted to keep their business going. they took up these loans.
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to not talktend about the interest rate. is it appropriate to call it one because the loans of 43-6 months. they're lending to small businesses who have very profitable investment opportunities. business withit a such great things to invest and live on such hard times? >> 125%, that the highest you be talkinguld we about much more? >> that is about the highest. 124%.ange from 29% to quest do they care at this point? >> they would not talk to me about this. they have an initiative, 10,000 small businesses, where they try to connect small business with oral capital. >> this is one part of it. think thisnot
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counts. >> all right. thank you for joining us. coming up, building the next silicon valley. steve does not think all the great tech ideas have to come out from the west coast. plus, he has got the beat. the cofounder of spotify explained why listeners should -- waste a lot of time ♪
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>> 40 million global users and 10 million subscribers.
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quest i think it is a much better model mini itunes model. that said, what i think we'll end up happening, and even looking at my home country of what isd -- sweden, interesting is spotify is 17% of all the revenue in the entire music industry. so, you know, what is interesting there is itunes is still available and still an important revenue source in addition to that. also, vinyl sales, we are the enough, spike. they have really grown. the future of the music industry, although the masses will certainly opt for a description, we as people are also willing to pay for music on top of that. >> you can see the full right here onght
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bloomberg. every mayor in the u.s. would like to start up their own silicon valley and created a lot of spotify's. steve case, the founder of aol, would like to help the cause. month. four cities next had to get detroit, cincinnati, pittsburgh, nashville. he is the current chairman of revolution. great to see you again. tell me why these four cities? quest great companies all over the world, the pride of the world, the envy of the world. heartland of america is hot as well. we decided to do a road trip to the heartland of america to shine a spotlight on the out doors of the cities and some of the startups in the cities to interest,re investor reaching out to some of these
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regions that are really showing great signs of momentum. it would be a stronger jason -- nation if we had our ecosystems read more broadly. each city is more -- a little different. in detroit, we're meeting with the governor and mayor and visiting companies and having a pitch competition, a fireside chat, a party and happy hour to celebrate entrepreneurs. it will be a full day in each city trying to shine a spotlight on the best things that happen in those regions. we're looking for investment. we're hoping other people will start paying attention to what is happening. it is quite inciting. >> do you have any investments in those cities? what we do. they company in cincinnati and we are looking for things in detroit and pittsburgh. we made a small investment in a company in nashville.
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they brought entrepreneurs from several different regions together in silicon valley and i dartt in all 10 of those of spear one of them is national. we hope we will do more and was of others will as well. >> this is not the first time you talk to governors and mayors and politicians trying to create the culture in some of these cities. tell us what they are saying to you. what is the hurdle? quest there is good momentum. the hurdle 10 years ago is that people do not believe they could create a startup and thought it had to be silicon valley. because his easier and cheaper you canurce things, create these companies with smaller teams and that is encouraging. as capital starts to focus on these opportunities, that will provide the capital necessary. it is also important -- it is not just about tech companies.
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other sectors and manufacturing and nervous as and things like that. under armour started in baltimore maryland. , now $50 million, denver, colorado. the phenomenon of startups happening all over the country is picking up steam. the road trip to the mainstream parts of america is really designed to attract more attention and build these regions and take them to the next level. >> you talked to so many entrepreneurs. one of the big issues is labor. where you will go start your company at the place where you will have the most amount of talent. isn't that a big hurdle? class it is. we act a company in australia and then opened an office in san francisco.
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these are becoming more global companies. accessing talent wherever it might be is much more important. washarted aol here in the and easy area in 1985 and there was no way we could build at our peak. the evidence suggests, while it is a little harder to get the capital, it is hard to get the attention and initial talent. once you get going, the momentum can be very strong and you can be a bigger issue in a mall or that is an opportunity for entrepreneurs and investors. >> are you bringing anybody with you? that's sure. we will have a special guest in each city and invite other ofestors and other members the media, people from the government sector. it should be a fun road trip
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across middle america, really celebrating art of. you are welcome to join us. why don't you do your show him it burke and detroit? -- pittsburgh and detroit? it is fighting its way back now in detroit. the silicon valley chapter is relatively recent. goes back a long way to the agricultural revolution of these regions are getting stronger again because of startups. class i want to take you up on your invitation. i am inviting myself onto your bus. thank you so much. steve will take -- stay with me through the jobs report coming out. up next, we will head back to the mcdonald's head porter, where minimum -- workers are
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protesting form in which i could. ♪ -- for a minimum-wage hike. ♪
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class you are watching "in the loop. so shall to itsys ragu and pops the sauce business. they are selling the brand for about 2.15 billion dollars. the sale is part of a strategy to opus on its health and beauty projects whilst knowing slower growth food dance. going green. the company will then up to or million dollars -- discover technology will need air pollution standards.
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he does days after declaring martial law, the army chief has staged a coup. he took control and a group has been meeting to find solutions to the six-month-old little crisis. 26 minutes past the hour, bloomberg television is on the market. equity futures are slightly we willhis might there get economic numbers today, including in just a few moments, the initial jobless land, expected to come in at 300 and 10,000. again are on the markets in 30 minutes. something else we are watching, protests for higher wages at mcdonald's is reaching a fever shareholdersannual meeting. you're looking now at a live shot of protesters who are demanding higher wages of $15 an hour at least. there have been some arrests. the aol founder
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who spent years in washington to and policies. mike mckee is also joining us. i want to switch gears here for a moment. you have young people who you talk to everyday who are graduating college and saying, want to be the mark zuckerberg, want to make my millions, i want to build my company, then you have workers at mcdonald's say, fewer and fewer young people work at mcdonald's, and the adults are left working at these jobs we cannot live on. there a bubble here that is forming? clarify do not think it is a bubble but there are dynamics that are different than what we saw in the past. people work in the agricultural sector. it is down to two percent.
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the industrial revolution took off in the automobile and steel industry created enormous numbers of great middle class jobs. the economy was strong and the company was strong. if in a lot of wealth for people but has not been as good at creating jobs. know by nowy, you that google buses has become a cliché. about howard so much that underscores the income inequality. . should tech leaders be more focused on trying to close that gap versus talking about things like immigration reform? >> immigration reform is important because we have to win what is a battle for talent because we have to create the next-generation of startups which create a next-generation of jobs. 40 million jobs are created by young companies him a startups. focus on startups
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as a way to get this going and make sure we are leading in the next revolution. but yes, people in the tech community could do a better job of communicating broader benefits of what they're trying to do and doing a better job not just focusing on income equality, but focus on the opportunity gap and make sure starts can reunite the dream for everybody. but more forng, step up and close the opportunity gap. classes this has been a different kind of recovery and so was talking about that, or you have a lot of high skilled jobs being created and a lot of jobs in the tech industry. of jobs beingt created at the lower end, the food service workers, mcdonald's, and what is missing is that middle-class construction worker,
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manufacturing worker is not being hired back. economy has not recovered and those people are the key to the thriving middle class and we had to figure out why and what you do about it very >> you mentioned tech leaders should be more vocal about this. what about you? >> i am pretty vocal about it. -- having aing committee and having leaders come together and come up with ideas in terms of how you create more ideas for everybody and millions of world jobs. there is a role for tech companies. sometimes, you cannot measure it by the jobs they create directly but also indirectly. with 300 a company employees but they have four hundred 60,000 retailers on e-commerce retailers that have hundreds of thousands of employees. sometimes, platforms have a broader impact on jobs you can directly measure. we are also looking at backing companies creating jobs.
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that is a focus at revolution. >> we have got jobless claims out now. 320,000 is a bit higher than what economists estimated. >> statistically insignificant. monthps us below the six average of jobless claims. the excitement is not fair, but it is -- we believe the payroll survey was taken. we get to june, people will still be looking for above 200,000 jobs probably because it suggests the labor market did not change all that much. >> i do not see any reaction to these numbers. mentioned tech companies is not just the number of jobs they create but also the spillover create --t that also
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helps create jobs. if you talk to protesters, i imagine some might come out and say to someone like you, what about the tech oddities that are taking away jobs from people like me? any number of companies, the amazons of the world that are automating functions of jobs that used to hire people that is now being automated. >> that is true. the reality is technology but also lot of value productivity gains. that also means doing things more effectively. andneed people to do that that does result in a loss of jobs. the tech companies have a lot of benefits and it held strife the economy but the job creation side has not been as strong as over phases of our economy history and we need to double down and focus on that. some of it is focusing on
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indirect benefits of tech companies, but also recognizing a lot of great companies are being created that have very little to do with tax and they are part of hours hard up ecosystem as well. through the middle of america, china is trying to spread the spotlight on great ideas, including nontext companies. >> do you support a minimum wage hike? >> i do. i recognize there are dynamics and some concern it could result in job losses and some sectors changing how able count hours, but in general, it is the right thing to do and is happening in a number of states already. that momentum will continue. back tolso say, going the productivity issue, there is evidence gains in technology including robotics are resulting in bringing just back including china, because they can manufacture because they need
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fewer people. than are fewer people now 25 years ago, but jobs are coming back here 10 years ago, people thought of the another -- a collocated mix of things. it is a great jobs report. we will continue to create jobs and drive the economy. >> henry ford created a thatacturing industry added thousands and thousands of more jobs. this tech industry does not add jobs but it may add other things. even if you educate all the people who lost jobs, will there be jobs for them available? >> i'm optimistic. i recognized tech has buses and minuses. there are indirect benefits able that doully appreciate create a lot of jobs. a lot of people are able to do -- participate and able to get
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part-time work that otherwise did not exist. there are some boundaries but overall, it is true that technology -- we need to focus tousing startups not just drive the economic growth, which is critical to solve our fiscal problems, but job creation again, which has got to be part of our focus. we have got a lot of good ideas over the summer. we will come out with our recommendations in the fall. but our startups can help reignite the american dream. >> thank you so much. of cofounder -- ceo revolution. there is breaking news. bee ceo duncan is going to retiring. a successor named. andton is going to retire
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we will have much more on this in a moment. we will be right back. ♪
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>> dump-in eater our -- duncan neiderauer. the former futures president will succeed him as the president of the and why groove and that takes place immediately. this is part of a transition. duncan niederauer is stepping down. he is accelerating his planned departure. we will continue to keep an eye on the latest developments.
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>> thank you. time for today's bloomberg big number. the cost of a new stadium of minneapolis. the nfl announced the decision yesterday that the stadium is scheduled to open the 2016 season. dollars. the nfl is to reward. then -- ins and bidding. the deal between at&t and directv looks like it will pass regulatory scrutiny. not, but directv does not renew the nfl's sunday ticket package, which televises out of market games. joining us now is the entertainment and media founder.
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this is interesting. blessed is good to be the nfl. qwest clearly, you get a lot of dudley, --eir is qwest clearly, you get a lot of leverage. >> does directly -- directv get to renew the package? >> yes. ke$hanly, it is the nfl leverage. maybe they will increase dollars there are other clauses and they want to get out in the marketplace sooner to take advantage of the top television. that this has been a package, the linchpin of driving growth in directv. it has been an exclusive package. the feeling in the marketplace is this maybe the last exclusive deal they do.
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going forward, they may want to offer the back edge up to netflix and apple. qwest so it would be streamed at the same time? >> correct. dollars are there. is that band was going to be there? road, onears down the of the things that might be adjusted going forward is the length of the deal were the nfl can go back in the marketplace where they can see opportunities. how much do you think the nfl sunday ticket was worth, valued as part of the $48,000 deal? >> is around $1 billion a year. of the the valuation deal itself. before this ever came about, they were probably going to get a 67 -- increase.
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there has been substantial increased -- interests and ideals of ghana by that amount. the question now is, does it go up further or to the terms get adjusted because of at&t involvement? nfl, everybodye wants me and wants my content and they need it live. why don't i just sit back and let netflix, amazon, apple, cbs, abc, all those guys, just for the right to broadcast my stuff? >> they do that in a package by they offer up sunday and monday night and the opportunity for all these companies to bid for those right. the nfl seems to like to have a number of media companies be involved. the nfl, there is no one exclusive deal with one technology or media company. of having the range
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of opportunities is perhaps you're not necessarily getting the ultimate larges amount of money on the table. also, you are able to win regardless whether broadcasters are down in cable is out. the nfl is involved with all the technologies and platforms and it wins regardless of whose stock is on top. qwest reaches you. sports entertainment media. coming up, the class most college grads were never offered. how to be your own boss. we will be back. ♪
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qwest most grads are thinking about where they might go and get a job here it in the case of young women, a growing number of them are looking to start their
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own business is versus pursuing traditional jobs are his is moving up the ladder. trends as well as advice from a number of entrepreneurs. youor-in-chief cindy, thank for being here this morning. qwest this is a millennial and female trend their careers and under 40, all women essentially. a growing number of them are saying, the ultimate dream is not have the corner office in the established company. they do not want my job here they want to start their own thing. it makes us. this is the generation that grew looking at mark zuckerberg, etc.. many thought their parents were laid off during the recession. they have a sense there is no security out there and you might as well build your own thing. media. on social able to create their
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own brands now on youtube. they are thinking more entrepreneurial. class is the new dream. it is want. one inthem arey two women under 35 saying the thing they most want out of their careers is their own show. among women, there is a desire to create a company where they want to have a family. there was a new york times piece last week where they lived and thought many of them are decreasing the family-friendly benefits. a lot of women were looking at it and saying, fine, i will make my own company of my own rules. that is great. these women in their 20's and freshfaced, they have not seen the real world. older ande 30 and
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their family comes in having children, i just wonder then, are we setting themselves up for type of a crash later? >> i do not know if running a business in your 20's is a bad they have on your resume in your 30's, if you want to date, will work as well. if you decide you need yesterday security and are tired of the stress, you could always make that decision. i think about this when i am hiring people. i love to hire people who have done their own thing. it shows they are self starters. times, theew york latest. how are you looking at video. click the print brand and digital brand, those are over.
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if you're in the media brand, they are in all of it. they still love print magazines but are also on their phones all the time. >> digital was such a new thing. content you the created, similar to yours, it will drive down the revenue you're able to get? i fundamentally, it really comes down to great storytelling. we have success in video. our video only a year ago. we have 150 million views. them, screw you cancer, he followed a young woman, wonderful storytelling and very emotional. the first one by our company. digitalthe only enterprise honored along with hbo.
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class that was exciting. want good stories. thank you so much. the editor-in-chief of glamour magazine. up next, the billionaire who puts his money where his mouth is. tom wants to make a difference in november's upcoming election. ♪
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qwest the billionaire environmental acts -- activist versus the republican. tom made a fortune in the hedge fund he founded and is as go. 2.6 billionabout dollars. his big issue is climate change. climate-generation action team will brand republicans in those races as anti-science. that is the republican party, already firing back at him.
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the gop says he is a hypocrite. the party says he made money investing in oil and gas while advocating reducing carbon emissions. sire is one of the most prominent opponents of the keystone pipeline. evil struggling to a forecast do not need lessons in civic virtue from a billionaire they said. i spoke exclusively on these issues. for more on the fight, you can watch the full asked -- episode on our website. it is 56 minutes past the hour. bloomberg television is on the market. equity futures are still trending a little higher. job lines coming in, kicking a little above estimates. that is just statistical noise. do not read into that trend. coming out jonathan bush talked about a crucial issue his industry is facing. out over redit
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lobster and the future strategy. ♪
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>> we're 30 minutes away from the opening bell. the s&p just one half of one percent from its all-time high. future and it the is something called the make the movement. an exclusive interview with bloomberg coming up. a new leader for the new york stock exchange. is beating upuer his plans for retirement. was inanning to sink his the restaurant, reacting to sales of the radloff shane last it athomas, calling
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destructive transaction without shareholder approval and that is the accurate. cristina alesci has been all over this story. is being presented that this is shareholder value? it awaynagement gave for a puny evaluation. the way they get there is they --, ok you sold his chain sold his chain for $2.1 million or that private equity chain turned around and sold the real estate for one point billion dollars. that means you sold this business, the operating the andness, for $600 million he did it so tax inefficiently that you actually build it for $100 million over the value of the real estate. it is pretty damning the way they get to the math.
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it is hard to argue against a map. then there is the atmospheric around the deal. starport and other investors that's a word it feel like management investors have legally ignore shareholder demand and shareholder input, which by the way, flies in the of what we have seen over the course of the last year and a half with activist shareholders, where management is the morris and you and taking meetings and listening to these guys are sometimes, they have pretty mark ideas. just pretty smart ideas. -- they have pretty smart ideas. we have to see how they react this morning. we will have to do pretty aggressive pr because a lot of restaurant is has sided with the activist. the real action is a month they really make a change and block the deal from happening? the answer is no, but they could go ahead and make management and the board loses job. what is
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interesting is the question is, will the shareholders basically that the board of erectors that they propose today. last time around, we see the investors side. not's very interesting and the last leg of the story. best thank you for your reporting. in washington, roughly a year after it snowden started revealing he is about american surmounts passes, the house fix the first steps today to rein in him of them. those changes do not go far enough for some of america is the tech companies. peter cook is on the health more. the bill has the backing of the white house. class it does. strong support of the white house. the administration believes the deal encompasses many of the changes the president himself has told out over the last year or so is the story first hit the headlines.
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supporters of legislation, the bipartisan, that sounds national sick and rising needs, will walk you through what they say in the bill. it guards from collecting records of any kind, and they phoner say it will choir company so the government can still search for things but it has to go to the phone company and get a court order first. it provides those orders and allows you companies more information on when the companies asked for more information. the bill has come out of committee with bipartisan unanimous or and it also had the inanimate see the privacy support to try to address concerns with the intelligence community. there are critics now in the house of representatives and there are tech companies that oppose the coalition, google,
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apple, microsoft, saying in a statement yesterday this a minute over the unacceptable loophole and makes important progress. we cannot support the bill as drafted. urge saying those are overgrown. just overblown. we will have a pretty healthy debate on the floor. we will lead to see what happens with the outcome. >> what is the likelihood of the outcome? >> the leadership here feels pretty confident they have the votes to get across the finish line in the house of representatives. of changes have upset a lot members of congress in a deal specifically with times the government uses to deal with these going forward. i am not sure exactly what the outcome will be today. interesting.
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our chief washington correspondent. moving and shaking this hour, the cofounder and ceo of streaming music service spotify. has 10 million paying customers, 50% more than a year ago. it says it has 40 million active users on premium services. it talked about it is this model to charlie mohs. -- and youee because are essentially saying you can get access to all that music for free. we knew when people were listening to music and starting, they would listen more. that is why -- when they would start caring about the benefits of having better quality, not having to endure the advertising, being able to off-line download when it did not have a network connection to still have the music available.
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are really bigse things people are willing to pay for. if we could just get people to listen to more music, we will be in a great position and that is what ultimately happened very >> you can watch all of charlie rose's interviews right here on bloomberg television. the ipo was priced above the range last night. .ood news for the founder holdings in the company worth $4 billion. for more on the newfound wealth, i am joined by our bloomberg billionaire strategist editor. what is exactly holding ? >> what is really interesting about richard is he has got a really super voting control, 84%. any meetings they have come if
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you does not show up, he vetoes all of his shares. he effectively has complete control over the company. the second largest business in china, second only to alibaba. you see these two types of -- comemount of china out of china. it's very unusual. typically even with someone who has the large majority of voting power or walmart, they typically have to show up and if he does not show up, it is completely gone. qwest this company wants this to be like have stories were he gave remarks where he did not actually expire to be who would not want to be? headedtly where they are . if you look at alibaba and you m, they selling to a much bigger market than
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they will take a lot of proceeds in the warehouse to get delivery trucks and build up infrastructure to sell up in the market. qwest likely know about richard little? -- richard lou? know he started a company in 2004. he is very aggressive and controlling. it is really one of the pillars of capitalism they're starting to see in china. we talk a lot about china and how you might have to have connections with the government in order to really do business with a lot of industries and construction and real estate and that sort of stuff. , you are seeing a huge retail business tapping a massive market. he will be one of the pioneers of capital. he will be one of the richest people in the world before you know it.
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they pretty much sell everything. they take a broad model. .ou do not just sell books >> thank you. for more on the screws of index and more on richard lui, gutter website. to our more on recent cyber attacks. how safe would you feel having your health care information stored in the cloud? the ceo joins us next to tackle that question. an exclusive look at his plans to reboot the company. stay in the loop as we head toward the open. ♪
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>> you are watching "in the loop those quote live on bloomberg television. recentave been a slew of cyber attacks. a winter health care
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information, the industry moves more toward digital records. is the founder, chairman, and ceo of a cloud-based health information systems company. he is also the author of, "where does it hurt? " which argues that ceo's is can spot where the weaker links are that are than traditional folks. great to see you. have been on the show for several years pushing the agenda. you want our health care records. >> i'm jumping up and down outside your window every morning. tothe house industry has got be on board and bring tech into it. that question is valid here and what about my privacy? important really point. as we evolve into a health-care
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cloud where health care information actually does flow, where we wanted to, the alternative is awful. your x-rays get repeated and your lads get lost. nobody wants that, but everybody, as information becomes more concentrated, it becomes a juicier target for an error -- ne'er-do-wells. the doctor's office has next to no information security. they have no records. you get to help with over 50 million patient records, the standard we have told ourselves , we have to protect that information. it is way more than 50 times higher. qwest how much more is it than what citigroup has, or what security ebay or amazon has? >> we have the luxury of removing the choose your aspect of pirate, the financial word. there is no financial word to be
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all of the credit card and banking transactions we handle, they are immediately passed on to banking partners. none of the data is to be packed. hours is purely to referrals and authorizations and lab results -- results. qwest advertisers might want to know the private information of well-known people. >> absolutely right. the first thing you always do is make sure your target is non-juicy as possible and next thing you do is protect your target like hell. we do both. all the normal security you would expect to see in citigroup is with all of the redundancy. one of the problems is being hacked. another problem is a disaster damaging the information. redundancy and uptime is just as important to us as security.
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i've talked to people in the health care industry. analysts and ceos of hospitals and whatnot. there is no profit incentive for them to be -- to do -- >> you're on the book now? is this a question about the book? related to your book, but ifple who i talked to say there is no incentive for doctors offices, smaller hospitals, there is no profit incentive to do what you wanted to do, putting that information online. that is not true. there is an enormous incentive for doctors and half most. more than that, before it was public. thousands of doctors are seeing enormous profit associated with
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using software and associated services like ours. we are the only ones that do the medical records and billing. there will be more over time. doesn't it cost a lot of money initially to do this? >> no, that is the whole point. the hospitals try to put in their own software systems are spending hundreds of my and dollars -- of millions of dollars. there is an enormous profit incentive to let medical records happen online through an online service as opposed to try to build their own micro-clouds. the book is to try to get the same alignment of profit instead -- incentive and social incentive in other places. we have the health care cloud, what do we do with it? i hope -- of peopleells stories
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who have used getting their information into the cloud. mostly people who use the cloud to build. it. they placed the emergency room. -- a curatedtory experience of security care. those are the kinds of things we have got to get the profits to work around. qwest rarely more ahead on this. thank you for joining us. jonathan, the ceo, great to see you again, author of where does it hurt her and we will be back in two minutes. ♪
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>> we are a few minutes away from the opening bell. equity futures. we have got the top 10 traits you do not want to miss right after the break. keep it here. ♪
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>> welcome back. bloomberg television is on the markets. achieve markets correspondent scarlet fu is with the latest records for the open. class a slightly higher open. little change after yesterday's rally. on the flipside, chinese manufacturing an index on that rose to a five-month high. that is a positive or both of those are offsetting one another. outside equities, prices are down on treasuries. was earlier at 2.56 six percent, now down two point 54%. still elevated by attack.
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the yen remains uighur. dollar soaring after the military to cleared a coup. we will be back on the markets in 30 minutes. >> thank you so much. she markets correspondent. let's count down to the open. these are the only trades you need to know about. alix steel joins in as well. let's start with number 10 and carnival. someone screw ships are going green. carnival will send $400 million on exhaust cleaning system. discover technology will help carnival meet the new air pollution standards for u.s. coastal waters. , china's largest sales company. atpriced 93.7 million shares $19 a piece. that is above the expected range of 18 to $18. the oilr eight is exploration and production company buying 106,000 acres in share reserve. pay about 630 $9
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million in cash for the additional -- >> activision blizzard. offering to sell the nearly 41.5 gameon shares and video companies still owned. the author represents about half of stake in activision and is expected to close next week. six, williams-sonoma. >> number five is dollar tree. the discount retailer first quarter profit estimates, the customer traffic and biggest tickets. number four, billionaire hedge fund manager -- kmart has been shedding assets
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and closing stores as it tries to turn is around. qwest we get to the top three. rentals america. shares falling in the premarket under new speculation rentals will make a bid for a smaller rival. the deal would combine the second and third largest sellers of tobacco in the u.s.. >> number two, children's play. the company is announcing first quarter warnings -- earnings that beat estimates. it announced a partnership expanding into latin america and the caribbean over the next few years. >> number one, best buy. the rub's largest consumer electronics retailer posting first quarter sales that trailed estimates. demand for mobile phones and other devices. avenue fell 3.3%, marking straight quarterly drop. the company's ceo has been trying to turn the company around with cost cuts, store closings, and adding space for vendors. to bring in the portfolio manager of market strategies very his call when
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the market swings to an extreme level, valuations matter. far beyondstretched the value. why do you say this? >> i think we're a little better than fair value. that ins nothing like terms of frozen earnings. when you do the math and go back over a long period of time and ere markets should be training, i think the market is a little bit ahead of itself. you would expect to see that, given that we have had -- >> would you sell? >> you have to go through the portfolio and find places where the math that worked a couple years ago does not work as well. when you look at the portfolio, it is all that valuation.
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but there are places where there are still opportunities. tech.ions look good in looks good. looks if you look at energy and materials, those groups have been punished dramatically. youging markets turnaround, can get a pop there. >> there are a few areas that you do like, kevin. there is a bearish case on s consumer staples. >> they may offer dividends, but there are challenges. p&g does not have much pricing power. it limits their sales. beverage companies face higher cost for ingredients like orange juice. even though tobacco companies are in talks, it may take months
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for a deal to come together because of complexity involved. >> would you say to that? >> she brings up good points. staples are not as cheap as they were a few years ago. they have had a good run, but they are not high-quality money. pricing power will always be in -- an issue. when you think about what has happened globally, there has been a slowdown. a lot of staples are selling to emerging markets. that could change. from our point of view, you want to own quality and consistent earnings. you do want to be selective about price. still worth a look, given the quality of the companies in that sector. >> you mentioned materials earlier. i want to get to alex, who is looking at the case for
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materials. those stocks, it is all about industrial metal prices. they have gone nowhere this year. on the flipside, world food prices are at 10%. oil prices are up eight percent. this divergence of industrial metal prices might actually signal that growth is not picking up worldwide. on top of that, you also have china, a huge buyer of metals. this should be falling over the next few years. they have been skittish about doing too much, wanting to keep house prices in check. >> what about that, kevin? >> there is a lot there. a lot of what you're talking about has to do with the fact that the global economy has slowed down. that is pretty obvious. you look at china. that story is in the process of
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playing out. we just got data out of china that says there is improvement in the manufacturing sector. maybe it is too early to call a turn there. but both materials and energy reflect that. they underperformed very badly in the last year or 1.5 years. when dubai or straw hats? in the wintertime. the prices reflect concerns that if there is improvement, then you can get improving fundamentals. >> thank you so much. coming up, the intel ceo on the maker movement. stay in the loop to find out more. ibm has had to reinvent itself the number of times in more than a century. we will tell you how it may have to do it again to compete in the tech aim. we will be back. ♪
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>> the ceo of intel is hoping to read to the company's future. cory johnson spoke exclusively razanich and joins me from san francisco to talk all about it. tell us about the maker movement. >> this is an amazing thing. it is a group of entrepreneurs and inventors who are trying to frome games out of cloth, their bootstraps. firebreathing dragons to windmills to functional things and some things. krzanich thinks that intel may find their future inventors at these maker fairs. >> we have a whole group that is focused on this maker community now, building products for them. these are the people who will be the next steve jobs or google.
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these are the people who are being raised up with technology and innovation. that is what we saw over the last couple of years. are not aware of intel technology and what we are capable of doing and if we are not aware of what their needs are, then we will not line up together. >> so really, they're trying to put themselves in front of these future inventors. without a clear ideal of what they're going to invest. >> i guess that is part of the movement may be. have they always used the leftover pc components? >> quite the opposite. likehe discovered, and he, me, has young daughters -- discovered was very vibrant. none of them used intel chips.
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they created a whole product line focused on these makers. listen up. >> we saw innovation starting to come out and make their movements. a lot of these guys grow up and get on a kick starter and places like that. and you just want to be a part of that. you want them to know that if you really want to be creative, put intel inside. just like that. they were growing up without knowing it. >> i think this kind of shows the long-term thinking necessary for a company like intel. they missed the mobile phone market. what is the next great big edmonton -- invention? how can that person get cap accustom to using intel chips? he is trying to get ahead of what the future might bring. >> ra, thank you so much.
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you can catch more of his interview today at 1:00 on "bloomberg west." tech companies do not last long without the ability to adapt. ibm has mostly excelled at this. in the last few years, they have struggled to stay relevant and a new world powered by the cloud. that is the cover story of bloomberg businessweek. it will be on newsstands tomorrow. joining us now is the author of that article. nick summers -- first, tell us, how does ibm want to re-create itself? >> they get that the cloud is a big deal. it is as significant a turnaround for them as they have faced in decades past with mainframes and servers and computer revolutions. ceo gets that this is a significant poitn for them. can they pull it off? this is a challenge they have never faced before. >> they have faced many
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challenges, in fact. what is the deal between them and the cia? >> this is where the story began. there was a telling episode where amazon came up with a public cloud. they faced off for this contract for cia. the cia awarded this big contract to amazon. that is the big shot for ibm. >> a wake-up call. >> this is the cia. they won a public cloud within their own walls. this is a job with the highest technical demand, biggest security demand. there was a legal tussle over the award. the legal guys looked at this and said there is -- no chance for ibm to win this thing. >> they have some big-name investors like warren buffett. what about the short-sellers? >> that is one of the more
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fascinating showdowns in investing now. there are a lot of short-sellers on ibm now. alysts.nly 1 in 4 an on the other side of this is warren buffett. he is the biggest shareholder. it is the worst performing of his big for investments. he says he does not invest in tech stocks because he does not understand the growth rules. i talked toshorts said he is warren buffet, i am not. what does he see that we do not or vice versa? how would he miss the balance sheet of ibm? there is funky stuff going on there. >> very interesting. the ceo herself seems to be firmly in place? >> this is not the story of a sinking ship of a bad captain. people think she is a very capable ceo> .
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she says all the time that the cloud is a big deal. they're going to lead the enterprise into the cloud. she gets the bigness of this moment. even if ibm turns itself around and creates great cloud stuff, they have made their money in the past. amazon and microsoft and google are willing to cut prices. >> winky so much on that story. -- thank you so much on that story. test, download the app on your phone. we're back in two minutes. ♪
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>> 10 now for the global outlook grid with just three days to go
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until the presidential elections, ukrainian violence is growing in the eastern part of the country. they were attacked by pro-russian insurgents overnight, leaving 11 dead. there are reporters on the ground in that area. we took a closer look at the situation ahead of the election. >> this is not exactly a city under siege. but with armed men -- an armored cars -- now a common sight on its streets, it is certainly a city in the edge. russian] >> these are the forces of the new people's republic of tsk, declared separate from the rest of the country. a move the interim government in kiev swiftly condemned.
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ukrainian, hee a told us at eight checkpoint. now i don't even know what i am. a separatist, a terrorist, a rebel? anything but a ukrainian. a former database manager, he says he bought his uniform years ago in russia for a few hundred dollars. after an army base was ransacked, he got his guns for free. declaration has deeply divided residents here. a 42-year-old engineer who works for a major russian gas company. she says the pro-russian separatists are bandits who have broken the law. her 72-year-old mother disagrees. she says they are just sticking up for the people and the new leaders in kiev are the real criminals. such disputes have meant the economy, once an industrial
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powerhouse, is rapidly losing steam. they have denounced the new republic. visited, like we the statistics and delivery possessed, say revenues have halfed. it is now just days until the national elections. there is no certainty the results will offer any resolution. if the standoff continues much longer, it may not be lives being lost here, but it may be jobs. >> a tough situation there. kiev. joins us from what are the separatists and what do they want? >> there is a whole variety of people involved, betty. there are guys who come from middle-class professional jobs. one of the men we met was a former it worker. there are also those --
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who essentially are petty criminals. we saw evidence when we were there. a lot of these guys were drinking overnight. they did not have a great deal of professional military expense. they did not seem to know what they were doing. in terms of what they want, different members will tell you different things. some of them are very much in favor of becoming part of russia. others say they want them to remain independent. others said they were not sure. >> is russia involved in what is going on? yeah, there's definitely evidence of that. the new prime minister, the people's republic, is a moscow resident. no one is sure where he came from. he was involved in what was happening in crimea. that does indicate that russia is involved in this. a few miles away on the russian border --
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they have gotten hold of the uniform and russian weapons. >> can the situation be resolved at all before the elections? >> that is a tough one. the evidence of the ukrainian army that we saw -- we visited a checkpoint that was very similar a few miles outside of donetsk. they do not have control of the situation. they're going to try to resolve the situation. a lot of election offices have been closed or have had booths taken away from them. it will be a challenge to see that through. >> thank you for bringing that stories u.s.. that does it for today on "in the loop." i will talk to the cinemark president about how her company is taking the smell of success to a new level, using smell to get you in the door.
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that is tomorrow at 8:00 eastern time. ♪
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>> is 56 minutes past the hour, and that means we are on the markets. this gave caught up for the markets are trading. stocks are higher. we had some mixed economic data -- jobless claims rose, but chinese manufacturing or an index rose from a five-month high. a bigger global picture is winning out. in terms of individual names, we are keeping our name on -- eyes on darden restaurants. they're trying to block the deal
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to sell its chains. the deal is well below its value. star board controls about 2.6% of darden. 1.6% ins currently up early trading. investors are waiting for shares to begin trading under jd. ,his is good for alibaba which could be the largest offering ever. joining me is leslie picker. we have had a rocky start to the second quarter. what is the appetite for new issues? a as you mentioned, we saw flurry of new issues coming in and the fourth quarter and first quarter. all the supply hit the market. in the second quarter, things started to slow down. that is a really straight story. -- great story.
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i cannot devote the time and energy to buy your shares. as time has gone on, things look to be improving. we sell price is above the range yesterday. it was the third biggest offering in it of itself in this year so far. that is a good sign for the markets. it shows the demand for these chinese e-commerce companies. >> specifically. it also brings attention to alibaba. they have not given us a timeline for when they plan to list. >> right. the calendar for these types of ipos -- with all the first filing come out a couple of weeks ago. 6, month later, around june we should see revisions come back. and from there, it should take another month or so before they could theoretically start to do their roadshow and prices start
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trading. that would be the best case scenario. perhaps end of july or early august, we should start to see some decisions be made about alibaba. >> it does depend on market conditions as well. this is been a bit of a struggle for investors so far this quarter. >> the ipo trade last year with a big alpha -- way to get alpha in the markets. you saw a rise in the s&p 500. they were looking for momentum trade you outperform the market. that turned out to be a good strategy. as you see those 70% pops doubling to make that trade argument work -- that became less so. it looks like we are seeing more demand pick up. >> so, based on the conversations you have had, are they expecting a big pop in jd? >> they did price it high.
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but there is an argument may be made. demand is much higher. >> thank you so much. we are back on the markets once again in 30 minutes. "market makers" starts right now. >> live from bloomberg headquarters in new york, this is "market makers," with erik schatzker and stephanie ruhle. >> china rising. another chinese check firm in the u.s. -- it is the biggest offering ever of an internet company from china and america. >> this is been historically unproductive this year. there are ways to make money off of congressional inaction. we will tell you what to buy and what to sell. >>


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